Post-secondary education is costly and since it’s going to be more expensive in the future, you have to be prepared for it. To save yourself and your child from loads of their education cost, you might want to start a Registered Education Savings Plan (RESP).
The RESP is created to allow you to save for your child’s education by generating income and gains that are not taxable. When you start the RESP Brampton, you also get the benefit of the Canada Education Savings Grant (CESG), under which the Government of Canada contributes an amount to your child’s RESP.
RESPs are highly regulated and we’d like to present you the top reasons to take advantage of this solution.
You Want to Save For Your Child’s Education
In 1998, the Federal Government introduced this plan to encourage Canadians to save for their children’s post-secondary education. Under RESP Brampton, parents can contribute a maximum of $50,000 non-tax deductible amount in an RESP per child.
You Want to Save Taxes
Unlike the other schemes (RRSP, TFSA), with RESP you don’t have to pay tax on capital gains and interest income. This helps your savings to grow even faster. You don’t need to pay any taxes at the time of withdrawal because you didn’t receive a deduction on the initial contribution.
You Want Better Options for Savings
Like an RRSP or TFSA, you have many other options to save your hard-earned money. You can invest in stocks, bonds, mutual funds, etc. However, unlike other options, RESP Brampton is a risk-free investment.
Invest in Friend or Family’s RESP
RESP doesn’t only allow the parents to invest, but it is an open scheme where relatives can also save for the future education cost. You can save for the education of your grandchild, nephew, niece.
When you open RESP account, remember that you have 60 days to withdraw from the plan. Make sure to read and understand the ‘terms & conditions’ outlined in the short Plan Summary carefully.